Home Case Index All Cases GST GST + AAAR GST - 2020 (11) TMI AAAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (11) TMI 489 - AAAR - GSTLevy of GST - Business or not - Supply or not - common law Principle of Mutuality - contribution charges collected by the Appellant from the members of the society would be construed as “consideration” in terms of Section 2(31) of the CGST Act, 2017 - HELD THAT:- The activities performed by the Appellant are entirely oriented towards providing facilities, benefits or convenience to its members, whether it is obtaining the conveyance of the right, title or interest from the promoter, or management, maintenance or administration of the property of the society, which are shared jointly by all the members of the society, or undertaking various social, cultural and recreational activities for the members. Therefore, all these activities would rightly get covered under the definition of the term “business” as provided under Section 2(17)(e) of the CGST Act, 2017, which unequivocally stipulates that provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members would be included under the meaning of the term business. The legislature wanted to bring the activities of clubs, association, society or any such body under the ambit of GST law. Therefore, this clause (e) under Section 2(17) has been categorically carved out under the CGST Act, 2017. Thus, provision of any facilities or benefits by a club, association, or society to its members against a subscription or any other consideration would be construed as business. It is needless to elaborate that any society is formed with the sole objective to provide help. benefits or facilities to its members by way of undertaking management, maintenance and proper administration of the society property, which are owned jointly by the society members. Thus, each and every member of the society is benefitted by the formation and functioning of the society. In the present case also, the Appellant is undertaking various sorts of activities, which inter-alia includes the management, maintenance, administration of the society property, payment of various statutory taxes like payment of electricity bill of the common area of the society, water tax levied by the local authority, etc. along with organising various social, cultural, and recreational events for the members of the society against the contribution called “society charges”, which can reasonably be construed as “consideration” in terms of Section 2(31) of the CGST Act, 2017.Under the provisions of the CGST Act, 2017, the Appellant is doing “business” in terms of its definition provided under Clause (e) of Section 2(17) the CGST Act, 2017. Since, the Appellant is providing services to its members against the consideration, named as ‘society charges’ in the course or furtherance of business, therefore, the activities would be construed as “supply” in terms of Section 7(1)(a) of the CGST Act, 2017, and accordingly will be liable for GST. Even though the Appellant have contended that the said question can be categorized under Clause (e) of Section 97(2) of the CGST Act, 2017, which deals about the determination of the liability to pay tax on any goods or services or both, it is stated that the Clause (e) does not speak about the computation or assessment of the tax liability of any transaction, but only the determination of the liability as to whether any supply of goods or services or both are liable for GST or otherwise. Hence, the contention put forth by the Appellant is not acceptable. The activities carried out by the Appellant would amount to supply in terms of Section 7(1)(a) of the CGST Act, 2017, and the same would be liable for GST subject to the condition that the monthly subscription / contribution charged by the society from its members is more than ₹ 7500/- per month per member and the annual aggregate turnover of the society by way of supplying of services and goods is also ₹ 20 lakhs or more.
|